Starbucks shuts down 50 stores in Malaysia due to boycott

The popular American coffee chain Starbucks has temporarily closed 50 stores in Malaysia amid declining revenue, following an ongoing boycott of several international brands perceived to be pro-Israel.

Starbucks operates 408 stores across Malaysia, with dozens now shut down nationwide. However, the company has not explicitly stated the reason for the closures.

Berjaya Food, which oversees Starbucks operations in Malaysia, released a report in August highlighting that the ongoing conflicts in the Middle East indirectly impacted sales.

The report noted “significantly lower revenue and pre-tax losses” during the current quarter under review.

According to Berjaya Food, the company incurred a net loss of RM38.2 million ($8.6 million) in the three months leading up to June, and a total net loss of $20.5 million for the financial year ending in June.

The financial challenges prompted the closure of some stores in August, with the total number now reaching 50. To minimise the impact on employees, affected staff were reassigned to other nearby outlets.

Starbucks, the global coffee giant, reported a 7 percent reduction in global sales for the July-September quarter, marking its third consecutive quarter of decline.

The downward trend is reflected in the company's full fiscal year results, with a 2 percent drop in comparable store sales and a 25 percent decrease in earnings per share to 80 cents.

The company's consolidated net revenues also declined by 3 percent to $9.1 billion for the 52-week period ending September 29.

Experts suggested that Starbucks' financial woes may also be linked to the growing global boycott movement protesting the company's ties to Israel. 

The coffee chain has faced intense criticism and protests worldwide for its perceived support of Israel's actions in Gaza.